Australia¡¯s politicians will have to return to talks about fee deregulation ¡°to deal with our public finance issue¡±, according to the Queensland University of Technology vice-chancellor.

Peter Coaldrake also warns in a newly revised edition of his 2013 book, Raising the Stakes: Gambling with the Future of Universities, that with the government still budgeting for major cuts despite plans for higher fees being thwarted, the Australian sector ¡°remains highly vulnerable when reality finally hits¡±.

Professor Coaldrake, a former chair of Universities Australia, gave a lecture on ¡°Deregulation and marketisation in English higher education ¨C lessons from Australia¡± at the Policy Exchange thinktank during a recent visit to the UK.

If Australia were to combine its government-backed income-contingent loans system with uncapped fees, it would be a major development in world higher education.

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But plans to do so by the previous Liberal-led government were blocked by Labor opposition. While the Liberals remain in the driving seat following this year¡¯s federal election, they still lack the Senate majority that would be needed to push through fee deregulation.

Professor Coaldrake told Times Higher Education?that there would be ¡°difficulty getting any change through for a year or so, until such time as both sides in politics start to understand that we¡¯ve actually got to deal with our public finance issue. The reason I¡¯ve supported deregulation is because I thought it was the only game in town provided you could look after [poorer students].¡±

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He added: ¡°I don¡¯t see much change for a little while, but I see a return to the table to have a discussion about this.¡±

In his book, co-authored with QUT principal policy adviser Lawrence Stedman, he writes that savings linked to the government¡¯s 2014 deregulation plan ¡°continued to be factored into government budgets despite ongoing rejection of the reforms by the Senate¡±.

While the savings were reduced ¡°to around A$2 billion¡± in the 2015-16 budget, ¡°the sector remains highly vulnerable when reality finally hits¡±.

Either ¡°students will pay more or universities will take a cut, or a combination of the two will emerge¡±, he adds.

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Since the federal election in July, the Group of Eight, which represents research-intensive universities, has called for the scrapping of the demand-driven system ¨C warning that growing student numbers spell a potential risk to the financial sustainability of higher education.

But other vice-chancellors have called that stance ¡°elitist¡±, ¡°selfish¡± and even ¡°crapulous¡±.

Professor Coaldrake said: ¡°People say ¡®cap the system and give the money to the research-intensive universities¡¯¡­I¡¯m not sure it¡¯s as simple as that. I think the system is reasonably self-capping and that probably 40 per cent [participation by young people in higher education]...is going to be achieved without trying too much.

¡°And by the way, 40 per cent [participation] is not such a silly public policy goal. China is 40 per cent, Singapore is 40 per cent, America has one university for every 550,000 people, roughly the same as what we do. That¡¯s not the issue; it¡¯s how quickly poor people progress under [a] demand-driven [system] as opposed to others.¡±

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QUT, based in Brisbane, will host the THE in April 2017.

john.morgan@tesglobal.com